10 Global Consumer Trends for the Next Five Years

EXECUTIVE SUMMARY

1. The Search for Value

2. A More Cautious Approach to Credit

3. People Power

4. Multicultural Consumerism

5. The Fight against Obesity

6. New Attitudes towards Growing Old

7. Experience-based Consumption

8. The Rise in Social Responsibility

9. The Chemical Backlash

10. Mobile Cocooning

Summary 1 The 10 Global Consumer Trends and their Impact 2012

INTRODUCTION

TREND 1: THE SEARCH FOR VALUE

Trend Outline

Consumers want more bang for their buck Euromonitor survey confirms consumers’ love of bargains Chart 1 Consumer Shopping Habits 2011

Implications

Less loyalty, more research Growth of online shopping Group buying takes off Diversifying into health Price comparison websites Discounters benefit from no frills approach Fixed price stores boom Chart 2 Global Retail Growth vs Growth in Discounters and Internet Retailing 2008-2012 Fast fashion A loss of loyalty

Outlook

Chart 3 Forecast Global Consumer Expenditure and Prices 2011-2016

TREND 2: A CAUTIOUS RETURN TO BORROWING

Trend Outline

From boom to bust Higher saving rates Table 1 Saving Rates 2006/2011/2016 Slowdown in lending Surge in education loans Signs of change Chart 4 Consumer Credit: Global Outstanding Balance per Household 2007/2012

Implications

Impact on financial cards Table 2 Number of Credit, Debit and Pre-paid Cards in Circulation 2007/2012/2017 Chinese take to credit cards Chart 5 Leading Growth Markets for Personal Credit Cards 2007/2012 New types of lending emerge Peer-to-peer lending

Outlook

Slow recovery of credit Education lending will remain buoyant Credit unions may put pressure on provide the ideal solution Chart 6 Global Consumer Credit Balance: Forecast Growth by Category 2012/2017

TREND 3: PEOPLE POWER

Trend Outline

Word-of-mouse Chart 7 “How Often Do You Read Online Reviews?”, by Country 2011 The impact of Twitter Crowdsourcing

Implications

Tourism and foodservice rely on positive feedback The problem of false reviews Making the most of social media Celebrity endorsement is big business The merits of crowdsourcing Crowdsourced apps

Outlook

Chart 8 Number of Internet Users 2011-2016

TREND 4: MULTICULTURAL CONSUMERISM

Trend Outline

Greater ethnic mix Minorities gain economic clout Religious diversity Table 3 Selected Religions by Country 2010

Implications

Eating habits become more adventurous Celebrity chefs popularise exotic ingredients Ethnic trendsetters Chart 9 Sales of Spicy Chilli/Pepper Sauces in the US 2007/2012/2017 Religious preferences create new demand Ethnic beauty A growing segment Summary 2 Selected Ethnic Beauty and Personal Care Launches 2010-2012 Clothing

Outlook

More room for growth Targeted marketing

TREND 5: THE FIGHT AGAINST OBESITY

Trend Outline

The problem The cause The solutions Table 4 Obesity Rates by Country 2006/2011/2016

Implications

Consumers look for a quick fix Chart 10 Respondents “On a Diet Trying to Lose Weight” by Country 2011 Chart 11 Respondents “On a Diet Trying to Lose Weight” by Age 2011 Chart 12 Importance of “Limited Fat Consumption” by Country 2011 Impact on retail markets Table 5 Global Sales of Weight Management Products 2006/2011/2016 Table 6 Global Sales of Selected Better-for-you Products 2007/2012/2017 Foodservice focuses on calories Adapting clothing to new body shapes

Outlook

Obesity rates may finally stabilise Is stevia the answer? Opportunities in plus-size clothing Chart 13 Forecast Growth in Obesity Rates by Country 2011-2016

TREND 6: NEW ATTITUDES TO GROWING OLD

Trend Outline

Blurring of age boundaries Postponing old age Focus on health and wellness Table 7 Healthy Life Expectancy by Country 2006/2011/2016 Internet creates level playing field Chart 14 Internet Usage 2011

Implications

Opportunities in beauty products and services The use of glamorous role models Table 8 Global Sales of Age-related Beauty Products 2006/2011/2016 Opportunities in health and wellness Table 9 Global Sales of Age-related Health and Wellness Products 2007/2012/2017 Boom in cosmetic procedures

Outlook

Age will be just a number The ongoing quest for eternal youth

TREND 7: EXPERIENCE-BASED CONSUMPTION

Trend Outline

Money can make you happy Seeking the feel-good factor Emerging market consumers find new ways to spend wealth Chart 15 Intentions Regarding Spending Habits by Country 2011

Implications

Arrivals continue to rise Chart 16 Global Arrivals 2006/2011/2016 Developing markets drive outbound tourism Japanese discover the pleasures of budget flying Experiential travel The search for more exotic destinations Chart 17 Growth in Arrivals: Top 20 Countries 2006/2011 Daily deal sites fuel demand for experiences All in the service Restaurants make customers more welcome

Outlook

Quality of life will be paramount Make way for the Chinese Table 10 Departures from China 2006/2011 Leisure outlets set for growth Chart 18 Top 10 Growth Markets for Spas 2011/2016 Chart 19 Top 10 Growth Markets for Theme Parks 2011/2016 Chart 20 Top 10 Growth Markets for Specialist Coffee Shops 2011/2016

TREND 8: THE RISE IN SOCIAL RESPONSIBILITY

Trend Outline

Consumers show more compassion Growing interest in ethical issues Chart 21 Importance of Green/Ethical Descriptors When Considering a Purchase, by Country 2011 Consumers willing to pay the price Chart 22 Willingness to Pay More for Ethical Products, by Type and by Country 2011 Companies step up CSR efforts Cause marketing gains popularity

Implications

The growth of fair-trade Table 11 Fairtrade Sales in Leading Countries 2010-2011 Consumers demand locally-sourced products Free range foods go mainstream Eco-tourism: luxury without guilt

Outlook

Consumers will seek “three-dimensional” brands Opportunities in emerging markets Animal welfare concerns drive free range growth

TREND 9: THE CHEMICAL BACKLASH

Trend Outline

Demand for all things natural Chinese consumers concerned about food safety Chart 23 Attributes that Respondents Are Willing to Pay More for, by Country 2011 Organic regulations Confusion over labels Fake claims deter consumers Chart 24 Trustworthiness of Descriptors when Used to Label Products, by Country 2011

Implications

Impact on ingredients suppliers Botanical extracts in demand Chemicals gain bad publicity Summary 3 Impact of Chemical Backlash on Ingredients Industry Impact on packaged food Growing demand for NH food and drink Table 12 Global Sales of Naturally Healthy (NH) Food and Drink 2007/2012/2017 Organic benefits from natural image Table 13 Global Sales of Organic Packaged Food 2007/2012/2017 Restaurants sources more natural ingredients Natural beauty Increased distribution Summary 4 Selected Natural Beauty and Personal Care Launches in the US 2011-2012 Big brands fight back

Outlook

Plenty of potential, but transparency needed Opportunities in the ingredients industry Monk fruit extract has the potential to rival stevia Combining nature with science Table 14 Forecast Sales of Natural Ingredients 2011/2016

TREND 10: MOBILE COCOONING

Trend Outline

Increasing reliance on digital devices Smartphones used most for emailing and internet browsing Chart 25 Mobile Phone Use by Country 2011

Implications

Rapid growth in smartphone sales The emergence of tablets Chart 26 Global Sales of Smart Devices 2006/2011/2016 Table 15 Smartphones as a % All Mobile Phones 2006/2011/2016 Smart shopping The SoLoMo revolution Apps development The challenge of monetising content A new market of mobile gamers Commercial opportunities

Outlook

Potential in emerging markets Smartphones to become accessible to all Hybrid smart devices will create new demand Table 16 World’s Leading Markets for Smart Devices by Country 2011/2016 SoLoMo will continue to evolve In-app purchase models will help monetise content Chart 27 Global Mobile App Store Downloads 2011-2016